The Financial Supervisory Commission is proposing to amend the Real Estate Securitization Act (不動產證券化條例) by including the securitization of property under development and undeveloped land in a bid to boost the liquidity of real-estate owners and developers.
Jong Huey-jen (鍾慧貞), director-general of the Bureau of Monetary Affairs under the Financial Supervisory Commission, said that the authorities and the real-estate industry have reached a consensus to securitize property under development.
"In principle, we agreed to do that," Jong said at a weekly briefing yesterday.
"Nevertheless, the definition of `property under development,' the range of securitization applications, investment proportions and other supplementary measures all need further discussion," Jong said.
The bureau will hold further talks with the real-estate sector before reporting its proposal to the commission for final approval, Jong said.
The Real Estate Securitization Act -- which defines "real estate" as land, buildings, roads, bridges, tunnels, tracks, piers, parking lots and other properties with economic value -- was passed in July 2003 by the legislature to help revitalize the property market.
At the time, property under development and undeveloped land were excluded from the securitization plan, as lawmakers wanted to better safeguard investors' interests. But legislators also agreed to review the scheme two years after the enactment of the legislation.
The addition of property under development in the securitization plan would help increase the annual production value in the property market by NT$300 billion (US$9.6 billion), Chao Teng-hsiung (趙藤雄), chairman of Far Glory Group (遠雄企業), was quoted as saying in the local Chinese-language media yesterday.
Securitization of real estate refers to the process of converting properties into marketable equities for sale to investors, while undeveloped land refers to real-estate lying idle and which has not generated revenue, as well as properties under construction, being rebuilt or refurbished.
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